Generational Giving By the Numbers

Lori Halley04 October 20131 comments

Are your fundraising strategies optimized to take advantage of the charitable habits across all generations?

Two reports on generational giving confirm that “all generations are not created equal”. Blackbaud’s generational giving studies: The Next Generation of American Giving and The Next Generation of Canadian Giving (commissioned by HJC) look at “the philanthropic habits of four generations of Americans [and Canadians] e.g., Gen X, Gen Y, Baby Boomers and Matures [or “Civics” in Canada]. These reports offer insight into “generational giving habits” and behavior trends among these generations - insight that can impact your fundraising planning.

The Next Generation of American Giving – Top 10 Key Findings

Here is the “Summary of Key Findings” offered in the Next Generation of American Giving report:

Most Americans give. Matures [68+] are the most generous generation. A greater percentage of Matures give and they support a greater number of causes than younger generations. On average, individual Mature donors also give more money to the causes they support.

Baby Boomers will exert an outsized influence on charitable giving for the foreseeable future. Representing roughly one-third of all adults who give, Boomers contribute more than 43% of all the dollars donated.

Most donors across all age groups do not plan to expand their giving in the coming year.

Multichannel is the new normal. While all generations are multichannel in their communications habits, the ideal mix varies from generation to generation.

Direct mail is far from dead, but it also won’t last forever. More Baby Boomers say they give online than via direct mail.

Generation Y donors have distinct priorities and preferences with regard to causes they support. Notably, they are far more likely to demand accountability and transparency than older donors.

The value of some channels (e.g. social media) is undervalued if measured by transaction metrics, as opposed to by engagement.

Among transaction channels, the future looks cloudy for telemarketing and giving via SMS/text.

Peer-to-peer fundraising and crowdfunding, on the other hand, appear to have promising futures as fundraising strategies.

Nearly half of those who give engage with causes in ways other than making donations.

What about generational giving in Canada (eh)?

The Next Generation of Canadian Giving report (by hjc, Blackbaud, Edge Research and Sea Change Strategies) offers the “latest information about how four generations of Canadians give, how they prefer to communicate, what types of charities they support, and the implications for nonprofits trying to engage with them.”

It was interesting to see that the key findings in the Canadian report are almost identical to those of the American report, with a few interesting differences (also note that the generation identified as “Matures” in the US, are called “Civics” in the Canadian report):

Most Canadians give. Civics are the most generous generation. Almost 9 in 10 of Civics give, and they support a wider variety of causes than younger generations. On average, individual Civic donors also give more money than individual donors in other generations; however, the population is dwindling and their income is holding steady.

Baby Boomers will exert an outsize influence on charitable giving for the foreseeable future, but Generation X is quickly catching up. Gen X is certainly one to watch in the immediate term.

Generational differences and giving habits in the US versus Canada

So while the key findings are similar, it is interesting to look at the differences in “generational contribution of total giving” in the US and Canada. As you can see, while the percentage of Matures or Civics are very similar in both countries, the percentage of Boomers, Gen X and even Gen Y differ.

Recommendations for fundraisers:

The recommendations noted in the Blackbaud reports offer the same advice to fundraisers in Canada and the US - here are excerpts:

Keep your eye on the bouncing red ball. Boomers are highly likely to be the dominant source of income at least for the next decade, perhaps longer. Matures [Civics] are slowly passing from the scene but will still be a presence in 2023.

Multichannel marketing and fundraising is for everyone, but the optimal mix varies by cohort. ...

Prepare for the future today. There are things organizations can and should do to attract younger supporters ... Recognizing the full pay-off may take years, but peer-to-peer fundraising, designated giving opportunities, and crowdsourcing stand out as important opportunities, and will generate at least some income from Generation X and Boomers.

It’s not just about tweaking the tactics. Many of the biggest impediments to effective multichannel fundraising are organizational and political. Internal wrestling matches over attribution of channel income are commonplace and lethal to your efforts. Moreover, to meet the expectations of Generation Y, successful fundraising organizations are going to need to be far more transparent in their finances and far more serious about demonstrating effectiveness than they have been previously.

Know your donors’ birthdays. Not only can you send them a birthday card, ... but you can also begin to understand and track how your file is behaving generationally.

Don’t phase out direct mail now, but do have a “succession plan” for the mail channel. It is declining as the dominant source of direct marketing income, and there is no indication that the trend will reverse itself. In fact, the data suggests the declining trend may accelerate, as even Boomers shift to giving online.

Make donors happy. Many of the tactics fundraisers find themselves using (such as heavy solicitation schedules) are taking a toll. Now is the time to create and track donor satisfaction metrics, and closely track retention by channel and generation. It’s also time to pay more attention to inbound communications by donors. ...

What about charitable giving by youth?

While we are looking at all of the generations, what about youth? The Charity Navigator Blog recently reported that “about 90% of kids age 8 to 19 give to charity” according to Women Give 2013. This study (by the Women’s Philanthropy Institute at Indiana University Lilly Family School of Philanthropy in partnership with the United Nations Foundation), gained insight into “how [8-19 year olds] give to charity and ways in which parents teach children about giving.”

As Kathy Calvin, President and CEO of the UN Foundation suggests, “Young people are a force for positive change in the world. From grade school students raising money to fight malaria to teenage girls advocating against child marriage, today’s young people aren’t waiting to make a difference – they’re doing it now. As more parents talk to their children about the importance of giving, we will see new philanthropists emerge to help create a brighter future for all of us.”